Aid agencies are coming to realize that foreign aid itself may undermine democracy.
This article by Patricia Adams and Brady Yauch first appeared in the Financial Post.
Foreign aid, for decades used by despotic governments to line their pockets and finance uneconomic projects, is now being used by democratically elected governments to buy votes and remain in power.
That’s the message from a recent study by Ryan S. Jablonski, an assistant professor at the London School of Economics and Political Science, in a study titled, “How Aid Targets Votes: The Impact of Electoral Incentives on Foreign Aid Distribution.” By combining newly available electoral data with foreign aid data, Jablonski shows that “electoral biases influence aid spending in many, if not most, aid-dependent states.”
Examples abound. In Zimbabwe, citizens looking for food aid before the 2005 election were turned away if they couldn’t prove they were supporters of Robert Mugabe’s African National Union-Patriotic Front. In Ethiopia, shortly before the 2010 election, the government of Prime Minister Meles Zenawi reportedly held back the distribution of foreign aid – agricultural supplies and food aid – from families that failed to vote for his party, the Ethiopian People’s Revolutionary Democratic Front. And in Pakistan, foreign emergency relief offered in the wake of flooding in 2010 was allegedly withheld from opposition strongholds.
This latest abuse of foreign aid follows the West’s trend over the last two decades to tie aid to democratic reforms. More and more, poor countries are holding elections to qualify for foreign aid.
The problem, according to Jablonski, is that donor countries often “lack information about who is most deserving of aid funds” and so delegate that responsibility to recipient governments, who then take advantage of the windfall by delivering those funds to voters most likely to keep them in office.
In Kenya, where Jablonski mined aid and electoral data, this model worked along ethnic lines, with incumbent political parties using the foreign aid money at their disposal to help their own – or allied – ethnic groups within the country.
Looking at the three different ethnic coalitions that have led the country since 1992 (Moi’s Kalenjin, Kibaki’s Kikuyu, and Odinga’s Luo tribes), Jablonski shows that during their time in power, communities within each ethnic group – or in a coalition with them – received an above average, per capita amount of aid. When they were no longer in power, the reverse was true.
And while Jablonski uses Kenya as the chief testing ground for his hypothesis, he points to other developing countries – including Zimbabwe, Ethiopia, the Philippines and Pakistan – where governments have reportedly used foreign aid funds for political ends.
Delegating responsibility for aid distribution to poor governments, he concludes, “has perverse consequences” since “their first priority is to remain in power.”
While donors often talk about accountability when it comes to the use of their aid money, Jablonski says they “often lack the ability – or willingness – to distinguish between the neediest and the most politically expedient recipients.” After all, the aid donors aren’t up for re-election.
Needless to say, the use of foreign aid for porkbarrel shouldn’t surprise aid officials. More robust democracies anticipate such abuses and have laws to expose and stop them. Not so in the opaque world of foreign aid where donors and recipient governments share an interest in turning a blind eye to abuses.
Aid agencies are loathe to admit that their aid is used corruptly or for political patronage: They fear ruffling diplomatic feathers, undermining public support for foreign aid at home, and revealing their failure to help lift the poor out of poverty. Better to see no evil. Indeed, as Jablonski points out, donors may even prefer the candidate who is using their funds to secure power.
Many experts liken aid to the “resource curse,” whereby foreign aid – like oil wells or diamond mines – allows governments to be independent of their people by increasing the availability of public funds. Jablonski raises this issue, too: “governments may be less likely to collect taxes and more willing to divert public funds toward political supporters. These effects may jointly reduce the accountability of governments to voters by breaking the link between accountability and revenue and increasing the cost of mobilizing against the government.”
Aid agencies brought in democratic reforms in the 1990s when they realized that dictatorships didn’t lend themselves to development. Now they are coming to realize that foreign aid itself may undermine democracy.
Brady Yauch is an economist at Consumer Policy Insititute and Patricia Adams is an economist at Probe International. email@example.com